Financial Resilience during retirement

1. Financial Resilience during retirement Who is well placed to cope with life events? Lucy Malenczuk, Senior Policy Manager, Age UK

2. Research aims • (i) To identify what characterises an older person in retirement (OPiR) who is prepared for and well placed to cope with life events, from the perspective of experts and of older people themselves • (ii) To understand the reality of people’s experience against this ideal

3. Why older people in retirement? • OPiR have a lot in common with other age groups but: • Their focus is on managing resources, not accumulating • Retirement is increasingly financially complex • They are more likely than others to experience key changes

4. impact_of_later_life_events_reedit_1080p.mp4 Why older people in retirement? • It’s a big gap, which matters because: • 25% people 65+ have no savings • We’re talking about a fifth of the population, for nearly a quarter of the average life expectancy for those aged 65 today. • Financial shocks have a huge impact, with new research showing that loss of 75% of assets increases risk of mortality

5. What did we do? • We commissioned Collaborate Research to carry out: • Phase1 • Rapid evidence review and 13 in-depth expert interviews • Phase 2 • Pre-task followed by 16 x 2 hour focus groups with OPiR across the UK • and 8 x 1.5 paired depth interviews with retired couples across the UK • Reports on our website: https://www.ageuk.org.uk/our-impact/policy-research/publications/reports-and-briefings/

6. Key message 1: It’s never just about the money “I’ve got mixed feelings. At the moment I have security because I’ve got a big family, kids and grandchildren and we’re very close. They support and help us financially, emotionally, in all ways. I feel good about that. I love doing exercise but I’m worried because my mobility is getting bad and I have a lot of health problems. I also worry that the money isn’t going to last.” “Whatever happens to you in your life, you have to find the resources from within yourself to deal with it. You can put all the practical stuff in place, but what about the psychological and emotional?”

7. Overview – retirement landscape “My time is more flexible… its the freedom” • Best aspects of retirement: • hobbies & interests, travel, time with family “I don’t think any of us should be in this position at our age... It’s not what I planned” • Financial challenges: • often caused by unexpected major events e.g. serious illness, relationship breakdown, bereavement “Two years ago I wasn’t afraid in the house but now I am” • Some OPiR reported challenges adjusting to retirement, more generally some reported waning confidence

8. Key message 2: We need a fundamental rethink of the language I think timeframes are for people under 50! • “Planning” My mum [now] needs 24 hour care. She has to be taken to the bathroom and everything. So that was something that I didn't expect when I retired. • “Life events” It was ‘I’m saving for a rainy day’ and I used to think ‘it’s pouring! Spend the money now!’ • “Rainy day fund” I don’t think about the future. Live day to day. Wake up in the morning and I’m still here. • “Living day-to-day”

9. Key message 3: Balance being prepared with making the most of life now • Few people have enough money to cover everything • Time-based goals, like working out how long savings will last, are very difficult • There are some peace of mind benefits, usually to task-based actions such as making a will “I’m a trained counsellor so I have weight behind what I’m about to say. I don’t think it’s always good to think too much about what could be. That could end up making you very depressed.” • Acknowledge that today does matter as much as tomorrow • Consider a retirement checklist to present possibilities and preparations on a spectrum of difficulty

10. Key message 4: A vision of social care that is financially possible and positive “High prices. Loss of independence…tales of abuse and cruelty. If it’s residential care it’s coming to the end of the road for me. That’s why I can’t think of it now.” • Social care was associated with: • poor quality and neglect • residential care and catastrophic cost • misunderstandings about assets at risk “Should either of us have to go into care the house cannot be taken to pay for this as this is written into a mirror will.” “We want to redo the bathroom and just have one of these big walk in showers, because getting in and out of the bath is going to be a problem as we get older. So we’re thinking about that.” • So change the focus to independence at home?

11. Key message 5: High quality products and information needed to overcome barriers • How are products enabling good decisions in retirement? Equity release, white goods insurance and protecting assets were all mentioned • Demand for face-to-face advice but a lack of free and accessible help • Mistrust of professionals, but employer could be a gateway It’s difficult to get hold of them people… We tried a few years ago and in the end we had to solve it ourselves. They want everybody to do it on the internet At 55 they had a seminar where they sorted your living expenses and cost of living. Then they called you in again at 60 and went through everything then. It put me and a lot of staff straight.

12. Key message 6: Peer to peer support can help people overcome emotional barriers “We went out to dinner with friends who had done (a Power of Attorney). I’d never thought about it” • Sharing knowledge • Providing a trigger to action • People on their own don’t have a sounding board “If you’re lucky enough to still have a partner you can talk about it, argue about it and come to a decision. I think you need somebody to sound off on.”

13. Implications: Messages for the sector • Being well placed is about being able to cope with what life throws at you, both in terms of preparing and responding • Resilience isn’t a finite state, so measurement is difficult • We can communicate much more effectively with older people in retirement • There are multiple, real barriers to thinking about the future • Information and advice has a vital role to play – we need to help people find what’s already there

14. Implications: Promising approaches for intervention • Experience of discussing issues in peer groups highly valued • Opportunities for engineering triggers, perhaps mid-retirement MOTs? • Potential for use of checklists which reflect the challenges involved in thinking ahead. These should: • Think about small, achievable steps to increase resilience and quality of life • Recognise that reluctance to think ahead is not just about sticking your head in the sand • Recognise that today does matter as well as tomorrow

15. This is just a small part of the picture

16. If you want to get the best out of people… …play to their strengths

17. The last word “I think (it would be useful to have) a forum as we've today, you know, where people would be able to talk, so that you've got knowledge about different aspects, like the environment you're going to live in as you get older and you're less mobile, your money and Power of Attorney, and all these things. If you're informed in all of them, not just money but health, property, everything, then that's where you're going to be best placed aren't you, because you've thought through all your options way in advance before it's a problem.”

18. End.